The latest data from pay specialists XpertHR confirm that pay awards in the private sector in the three months to the end of July 2012 are set at a median of 2.5%. Because there are very few public-sector pay settlements recorded for this period, the whole-economy headline figure has been lifted by the deals in the private sector and now also stands at 2.5% – up half a percentage point on the 2% recorded for the previous three months.

Key findings on pay awards effective between 1 May 2012 and 31 July 2012 include:

• pay freezes still feature, accounting for one in six, or 16.9%, of the settlements recorded;
• after pay freezes, the most common basic pay award is 3%, the outcome in 17.2% of basic pay settlements; and
• 12% of basic awards are worth 4% or more.

This increase means that – in spite of the unexpected rise in retail prices index inflation to 3.2% in July 2012 – the headline pay award is lagging inflation by just 0.7 percentage points, the closest the measures have been since pay deals fell behind inflation in December 2009.

Over the year to July 2012, pay deals in the private sector are also worth a median 2.5%. This compares with the public sector where the median remains stuck at nil in the face of continuing government pay restraint.